Africa's external debt burden and the impact thereof of recent debt relief measures

Abstract

The African external debt problem intensified during the 1980s, notwithstanding the numerous debt relief initiatives announced by donor aid countries, among others. The rate of growth of the continent's external obligations was much faster than that of the major-economic variables and was even worse when set against the capacity of most African countries to service their external debts. The situation was exacerbated by the precipitous decline in the continent’s terms of trade, a fal1 interest in real net resource flow to Africa, a sharp increase in real interest rates, and a drought in number of countries which necessitated food imports.